Hotelier who took Jumeirah Group to the top flight
Gerald Lawless, the president and chief executive of Jumeirah Group, had one big worry on Monday afternoon.
In a couple of hours, he was due to host a glittering reception for 1,000 guests on the sand in front of the Burj Al Arab, commemorating 15 years of the hotel that has become the internationally recognised symbol of Dubai, and he was worried. “Don’t say it’s going to rain,” he said, nervously glancing at the sky over the Madinat complex.
“Ah well, you can’t worry about things outside your control,” he decided before settling down to talk about the extraordinary story of Jumeirah, his role within the UAE’s leading hotel and leisure group, and the future.
Not much has been outside his control since he joined Jumeirah in 1997. He of course acknowledges the vision of Dubai’s leaders, and their crucial role in setting the strategy that has led Jumeirah from one hotel back then to become an international chain of 22 hotels and leisure facilities.
But the hard knowledge of the hotel industry came from Mr Lawless, a native of Galway city on the west coast of Ireland.
When he accepted an offer to head up the under-construction Jumeirah Beach Hotel, he already had 23 years in the hotel business under his belt, including a four-year stint in the UAE running hotels for the Forte Group. But even he was blown away when he saw what plans Jumeirah had.
“I saw the plans of what was intended – at Jumeirah Beach, then Emirates Towers and the Madinat complex – and I said to my wife: ‘Wow, what is going to happen here is amazing, a hotelier’s dream.’ I was right.
“We told the architects designing the Madinat we wanted a Gulf theme to the complex, no high-rise, no Disneyland, and to go away and look at the building styles around the Creek in Dubai. They came back with more or less what you see now,” he says. Jumeirah’s growth coincided with, and significantly contributed to, the first big boom in Dubai as tourism and property prices mushroomed with the influx of visitors and residents in the early 2000s.
By 2004, the group was poised to embark on the serious phase of international expansion, under the umbrella of the government-owned conglomerate Dubai Holding. It had already bought the Carlton Tower hotel in London, but the long-term plan was rather different.
“We got full blessing for international expansion with a strategy that was asset-light outside Dubai, managing hotels rather than owning them as we do in Dubai,” Mr Lawless says.
The crisis of 2009 affected Dubai just as badly as the rest of the world, and global tourism slowed in the recession that followed.
“We dropped rates and there were a lot of price-led offers. Revenue per available room fell. But there was never a serious dip in profit because we also cut costs in the 2009 to 2011 period. Jumeirah, and of course Emirates Airline, continued with fundamental expansion plans throughout the recession,” he says.
Dubai Holding, with its big property and financial business, was seriously affected by the crisis and had to refinance billions of dollars worth of debt. Some analysts believe that Jumeirah cash flows helped to keep the conglomerate going then, to the detriment of investment in the hotels.
Mr Lawless does not agree. “We have always been a strong vertical of Dubai Holding, and we delivered as promised. It never affected capital expenditure to any great extent.”
By 2011, Jumeirah was ready to resume its ambitious plans for expansion, both in the UAE and abroad. The strategy has a three-way approach: the main Jumeirah luxury brand under the “stay different” heading; the new four-star chain launched this year under the Venu brand; and its expanding string of food and beverage outlets.
“Food and beverage is more or less a stand-alone company, and another vertical for us. We have 114 outlets in great locations with good brands,” says Mr Lawless.
Venu will compete in the expanding sector just below luxury, considered a growth area in the UAE and crucial to the expansion of hotel capacity ahead of Expo 2020. It is also aimed at international markets, with 25 hotels to be opened over the next 10 years, with Africa as a focus.
But the “stay different” five-star brand will remain the mainstay of the Jumeirah business. By 2023, Mr Lawless says, there will be 75 Jumeirah hotels worldwide, as well as the Jumeirah Living hotel apartments line.
International expansion figures high on the list. Hotels have already been opened in China and Europe, and there will be a push into South-East Asia. “We could also look again at the States in another two or three years,” says Mr Lawless
The heartland, however, will continue to be the UAE and GCC, which are the biggest source of visitors to Jumeirah’s properties. There are already hotels in Oman and Kuwait, and plans for openings in Bahrain and Qatar. “But we have got to get into Saudi Arabia. We’re working on a few things there,” he adds.
Jumeirah will always be a Dubai-centric company. At the moment, plans call for Madinat 4 – the extension to the complex there with, a new 420-room hotel nestling up against the Burj Al Arab – to open in 2016.
As Mr Lawless says: “The road to success is always under construction.”
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Published: December 2, 2014 04:00 AM